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EuroAMCBC in Prague with KFN+

Happy to announce my participation at EuroAMCBC in Prague on 10/31/2019. I’ll be speaking about the status quo and the future of the German Cannabis market / Ich freue mich, an der EuroAMCBC in Prag am 31.10.2019 teilzunehmen. Ich werde über den Status quo und die Zukunft des deutschen Cannabismarktes sprechen.

the-german-cannabis-report-v2-1

The Germany Cannabis Report by Prohibition Partners – with KFN+

download full report here

KAI-FRIEDRICH NIERMANN,
KFN+ LAW OFFICE, LAWYER

Medical

The market for medical cannabis has grown enormously since the change in the law. Total sales will reach €100 million by the end of 2019, with the share of finished drugs and cannabis preparations permanently exceeding unprocessed cannabis flowers. In the long term, not only will every European country set up a medical cannabis programme, but the international demand for medical cannabis will also rise steadily.

Against this background, the small quantities of cannabis grown, which have been put out to tender by the Cannabis Agency and have now been awarded for the first time, are not comprehensible. The German government currently does not want a medical cannabis industry like in Canada and the Netherlands. It is foreseeable that the tendered quantities will be far from sufficient and that imports will still be necessary over the next few years.

The Bundestag delegate Schinnenburg of the FDP wanted to know from the Federal Government in the context of a small inquiry in the Bundestag, what would happen with surplus quantities, which are possibly not needed in the local cultivation in Germany for the supply of the patients. The BfArM let it be known that such surpluses would be destroyed instead of being exported. I therefore assume that after the next regular elections in September 2021 (or earlier in the case of new elections) a new federal government will pursue a different policy and make possible a medical cannabis industry in Germany with the opportunity to export and to create thousands of new jobs. The FDP is already in favour of this.

All parties already now recognize that the research of medical cannabis must be promoted intensively. In 2018, an overarching resolution was passed in the European Parliament calling for increased research in this area and standardisation of standards within the European Union. Furthermore, the Federal Government supports a research project on medical cannabis at the University of Hohenheim.

Recreational

Popular support for the legalization of cannabis continues to grow.

In 2018, the German Hemp Association, one of the most active lobby groups for legalisation, launched a Bundestag petition with over 80,000 signatures, which the German Bundestag will have to vote on during this legislative period. In 2019, a justice campaign was launched with the aim of persuading judges and defendants to have the provisions of the Narcotics Law reviewed by the Federal Constitutional Court in the event of criminal proceedings.

It would be good if, after 25 years, the Federal Constitutional Court could once again deal with the prohibition of cannabis. In its 1994 decision, the Federal Constitutional Court gave the prosecuting authorities and politicians clear guidelines with regard to proportionality, which were never uniformly implemented. The courts have not discontinued every procedure for personal use, and the small quantity is still not uniformly regulated nationwide.
The black market has also grown considerably over the past 25 years, and the call for change from the judiciary and the municipalities has become unmistakable. In addition a state makes itself attackable, if legally a prohibition exists, which cannot be interspersed at all, and which confronts above all our police with unnecessary problems. If the purpose of the law cannot be achieved at all, existing regulations must be changed.
However, the Federal Constitutional Court is traditionally cautious if it should or would have to take action to shape the law itself. In 1994 it still said that cannabis has a certain dangerousness, which can be regulated by the legislator within the framework of its assessment prerogatives. In other words, the Federal Government and the Bundestag already know what they are doing.
If one of the cases in the justice campaign, which impressively summarizes the new scientific and legal findings, actually reaches the Federal Constitutional Court, the prospects for success are not foreseeable at all. He would be desirable.
In the meantime, all parties, with the exception of the CDU, have spoken out in favour of decriminalising consumers. The poll results of the Greens are still high, and here, too, a decision on the cannabis control law drafted by the Greens is due to be taken again in this legislative period. The Cannabis Control Act is based on a free market model, decriminalises consumers and legalises the trade in cannabis, taking strict account of social and drug prevention aspects. It can be seen as a blueprint for future legalisation, which will also generate thousands of jobs and billions in tax revenues.

However, since the grand coalition for major societal changes with the corresponding regulatory measures no longer has any strength, it can be assumed that a change in drug policy can only be expected with a new federal government at the next regular elections in September 2021. The development in Luxembourg will also be closely monitored from Germany. Luxembourg was the first country in the European Union to announce its intention to legalise cannabis and the Foreign Minister of Luxembourg called on his European colleagues to think together about a European solution.

Until then, pressure from local authorities, the police and the judiciary to introduce changes will continue to increase. Furthermore, several municipalities want to test the distribution of cannabis to adults in pilot projects. So far, however, these applications have always failed at the BfArM.

CBD

The CBD industry not only has to struggle with the fact that health-related statements are not possible due to the proximity to pharmaceutical law, but since March 2019 also with an amended entry in the Novel Catalogue of the European Union. Since then, a few sales bans have been issued against manufacturers and distributors, but not uniformly and on a large scale throughout the country. Even large retail chains have taken CBD products off their shelves again under pressure from the authorities.

Strictly speaking, only nicotine-free e-liquids with CBD are currently marketable. This does not apply to foods and dietary supplements obtained by an extraction process based on a specific enrichment of cannabinoids.

The necessary degree of legal clarity and predictability to develop a functioning industry with growth prospects on a sustainable basis is currently completely lacking.

The situation could only improve if companies applied for authorisation as novel foods for their products. Such an application has so far only been made once, for an isolate product in 2016, and has not yet been decided.

Another possibility would be for court proceedings to decide whether the application of the Novell Food Regulation to CBD products is legal at all. There are enough arguments against this, since hemp extracts have been used as food for centuries and only the technology for food production has improved. The fact that supercritical CO2 extraction is considered a safe process for food production is also expressly stated in several European regulations.

But even the large retail chains are reluctant to take legal action and give in to official orders. On the other hand, there are many black sheep whose products have unlawful health claims and do not even contain the ingredients that are stated on the packaging. Furthermore, it is not clear whether basic food production standards, such as hygiene and traceability rules, are always met.

Germany and Europe are also waiting for uniform industry standards that guarantee both the necessary level of consumer safety and reliable development prospects for the industry.

The EIHA (European Industrial Hemp Association) as a European industry association has addressed this problem and is developing various activities to define these standards at European level with the Commission. For example, a position paper has recently been sent to the European Commission calling for the authorisation of natural cannabis extracts in cosmetics and a corresponding change in the Cosing register with good arguments. The outdated and too strict THC guideline values in foodstuffs are also discussed by the EIHA with Brussels. These efforts also remain to be seen.

Cannabis Control Act, Product Safety and Vaping Crisis in the USA

Original Link on Leafly.de in German

Another aspect that determines the current discussion about the legalization of Cannabis, besides the already discussed aspect of social responsibility, is the often poor quality of the products available on the black market in Germany. Here, too, the Cannabis Control Act offers detailed regulations, which we would like to look at in detail today.

But first a word about the current vaping crisis in the USA. The market figures from the legalized US states and Canada show that 50 % of the market will be divided into smokables and extracts. Smokables are dried and unprocessed flowers as well as prefabricated joints for immediate consumption. Whereas the extracts „thc-infused“ are Vape Pens, Edibles and Beverages.
Now there were several 100 diseases and 7 deaths in the USA, which are said to have been related to E-Liquids containing THC. The products are said to have been available both on the black market and on the regulated market. The authorities are still trying with all urgency to clarify the causes. The first suspicions are that manufacturers have used additives that have caused the problems in the entire interaction and under heating.

For the just developing legal cannabis market in the USA, but also worldwide, this „vaping crisis“ is not a good signal. A panic is also not indicated, as it seems to be a very limited regional problem for the time being. However, the American legal system is designed to regulate and „tame“ the industry more through legal actions than through legal regulations. We can therefore expect a wave of lawsuits soon, which could bring the whole industry to a standstill. California was the first US state to introduce strict test methods for THC cartridges at the beginning of the year.

If we look at the Cannabis Control Act, product safety is another central component of this draft law. Thus, according to § 9 the

– the name of the placing on the market and the address of the manufacturer,
– the land of cultivation,
– the weight of the charge in grams,
– the date of harvest of the variety,
– the date of maximum durability,
– the list of other ingredients and
– the percentages of THC and at least one other cannabinoid, usually CBD,

must be specified.

Traceability is thus ensured. The consumer should also be able to assess the potential of the product he has purchased.
Furthermore, detailed warnings on the packaging and a package leaflet are prescribed, which must list contraindications and explain appropriate precautions, especially in the case of interactions. For proper application, the necessary instructions on dosage, type of application and duration of action, and instructions in the event of overdosage must be provided, among other things.

In § 10, which is expressly titled consumer protection, it is regulated that cannabis may not be placed on the market,
– if it has not been manufactured and tested in accordance with the state of the art in science and technology;
– mixing with tobacco products or alcohol is not permitted;
– Plant protection products, fertilizers, stock pesticides or pesticides may only be present in fixed maximum quantities.

Furthermore, the cannabis may
– not be contaminated with substances likely to endanger health, and
– not contain additives which are not clearly identified.

The problems with the partly poor quality of the cannabis flowers available on the black market in Germany, to which dangerous and even poisonous substances are partly added in order to increase the weight and thus the profit, have been well known for decades.

With these two paragraphs, the Cannabis Control Act aims to ensure the product safety of the future regulated market. This ensures that the consumer is protected from inferior and bad products from the black market or from dubious manufacturers.
This, of course, presupposes that these regulations are also strictly enforced and regularly reviewed. It must not be the case that, as in the Wild West, specialist shops are opened that are not licensed and the authorities do not follow suit in enforcing the licensing requirement. One might imagine one or the other corner in Berlin or another German city where something like this can happen.

Another challenge is the extensive control of the quality of the new cannabis products. In detail, it is still completely unclear and not regulated how it can always be ensured that only products with the required quality are put on the market.
For the new cannabis products, the extracts, there are already many legal provisions which must also be observed. Since THC and CBD have so-called CAS numbers (Chemical Abstract Numbers), they are subject to the European CLP and REACH regulations, with the corresponding additional requirements for product labelling. The Product Safety Act continues to apply to e-liquids, and the Tobacco Product Act will soon also apply to nicotine free liquids in Germany.

In the case of food products containing THC, there are also extensive food regulations.

As a rule, the legal system is structured in such a way that the entrepreneur must determine on his own responsibility which regulations apply to the products he wishes to bring onto the market. In addition, the law stipulates that a product must not endanger the safety and health of persons when used as intended or in a foreseeable manner. This must also be determined by the entrepreneur on his own responsibility. The entrepreneur must pay the greatest possible attention to product safety at every stage of economic activity, as considerable liability risks may arise.

However, there is usually no prior authorization requirement, such as for medicines, which brings us back to the vaping crisis in the USA. It is still being investigated whether the cases that have occurred are related to vitamin E acetate, which is reported to have been used in some THC concentrates. Thus, if traders, whether for greed or other reprehensible reasons, are too reckless in putting products on the market whose composition, when used as intended, cannot guarantee consumer safety, such a „crisis“ can be expected at any time.

It remains to be discussed whether the previous model, i.e. leaving it to the entrepreneur to decide first and foremost on his own responsibility whether to bring a safe product onto the market and only later to decide through controls or competition lawsuits whether this is really the case, is also suitable for the new, pharmacologically active cannabis products to come.

At least in the initial phase, as we now see in the hype surrounding CBD products, there will be many black sheep who promise the blue of the sky and whose products do not even begin to have the promised content of cannabinoids, or even worse, contain dangerous substances.

This will be the right balancing act between sufficient regulation and industry’s voluntary commitment. Strict requirements on the „compliance“ of the products pose a hurdle for market entry on the one hand, and generally already prefer larger and professional companies that can map these requirements, but on the other hand also guarantee the protection of the consumer.

In Canada, for example, where the new regulations on Edibles and Beverages will be introduced at the end of October this year, Aurora has been conducting an awareness campaign for several months now. In this campaign, the public is made aware of the new products, in particular about the effects of oral intake of THC, the dangers involved and how it can best be dosed.

After the last paragraph, the author himself sets off for a trip to the USA to get an overview of the legal markets in Colorado and California. A report will follow…

RA Kai-Friedrich Niermann
Lawyer